Rent Acts (Amendment)

I beg to move,
That leave be given to bring in a Bill to amend the Rent Acts to make new provision in relation to the supply of private rented accommodation.
In less than the span of a normal life the private landlord has all but been eliminated. At the end of the first world war, 90 per cent. of the population lived in privately rented accommodation. Unlike other European countries and the United States, virtually no house building has been undertaken for private renting since the second world war, and the figure has now been reduced to a mere 9 per cent.

The reason for that is easy to see. In part it has been the growing demand for owner-occupation and in part subsidised competition from local councils, but the major cause has been the imposition of rent control and security of tenure stemming from the first world war's temporary legislation.

Rents were fixed, even allowing for modest permitted rises, at levels too low to allow the property to be maintained, let alone to produce any profit. Property inevitably deteriorated and had to be demolished. The lack of any return meant that building for rent ceased, and security of tenure meant that individual property owners could not regain the use of their property when they needed it. At the first opportunity they therefore gave up letting. There is little need for me to reiterate these basic facts at length. Everyone knows that they are true, even those who, for political reasons, are loudest in denying them.

In any case, we should concern ourselves now with the consequences, with the fact that sections of society which traditionally depended upon the private landlord for accommodation now have the greatest difficulty in finding somewhere to stay, the fact that single people and families with young children, the most vulnerable and the least desirable tenants, are among those hardest hit, and the fact that thousands of houses are lying empty because their owners will not take the risk of renting them under the existing rules. According to the Office of Population Censuses and Surveys, there were 550,000 empty dwellings in the spring of 1977, of which 220,000 were previously in the private rented sector.

Thousands of properties are leased only to foreign nationals, who do not enjoy the protection of the law, and millions of pounds of housing investment has been destroyed during a period when an acute housing shortage has been the normal state of affairs. The result has been to deny many people access to housing, because councils have been reluctant to cater for minority groups, for the young, the mobile, and so on. Indeed, in 1974 controls were extended to furnished accommodation, and by 1976 150,000 lets had been lost. There was a 20 per cent. drop in the number of advertised lettings throughout the country.

We have created a position in which the mobility of labour has all but been destroyed——

The hon. Gentleman should be interested in the fact that it is often preferable to be in secure, low-rent accommodation and unemployed than to be employed
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with housing problems elsewhere. Even in the private sector, with all the problems of regulation and restriction, there is a higher rate of movement among the occupants than in the council housing sector. A study by the economic and statistics unit of the Scottish Economic Planning Department suggested that about 48,000 fewer families moved every year in Scotland because the great bulk of rented accommodation was in the public rather than the private sector.

The result has also been to force many families into buying property when they would have preferred to rent but could not do so. It is one of the great ironies of the past 60 years of housing that the activities of those on the Left who support rent control have done as much as all the housebuilders taken together to increase owner-occupation. Half of the houses that are now owner-occupied came from the privately rented sector, and many of their new owners would have preferred to rent them.

The Government have done much for the council tenant and to encourage home ownership. They must now help those who need, but cannot find, private rented accommodation, by encouraging the creation of a new supply.

My Bill seeks to build on the initiatives taken in the 1980 Act — shorthold tenure and assured tenancies. Complete de-control — to which I am ideologically attracted—would not increase the supply in the short term, as Labour's threats to reintroduce regulation would frighten landlords out of the market and reduce the supply of rented accommodation, as regrettably happened in 1957. There would also be substantial public expenditure implications in terms of increased housing benefit, and there would undoubtedly be hardship to some tenants.

The assured tenancy scheme allows landlords approved by the Minister to build houses for let at market rents, but with tenants having security of tenure. My Bill would amend the scheme in the following way. At present, the scheme applies only to England and Wales, and to newly built property. It should be extended to cover Scotland, of course, and to cover rehabilitated property, in order to encourage the revival of our inner city areas—precisely where there is the greatest demand for private rented property. The body blow dealt to the scheme by the phased withdrawal of capital allowances in the Budget should be mitigated by making projects eligible for urban development grant, and housing associations should be brought into the scheme. Capital allowances, far from being reduced, should be extended to cover the cost of land and services.

If Conservative Members are honest, we should admit that the shorthold tenure experiment has been a grave disappointment. In the first 13 months of its operation, 5,128 shortholds were created in England and Wales. Of those, 4,751 were outside London and a mere 377 were in the capital, where it is compulsory to register a fair rent. Even that exaggerates the position in terms of creating new tenancies, as probably not all of them were new lets.

The reason for the failure of shorthold lies in our mistaking the importance to the landlord not just of being able to regain possession but of securing a reasonable return. Fair rents are often substantially below market rents, as in London, where the scheme has failed and rented accommodation is badly needed. New lettings should not be subject to any form of rent control. In that
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way we can provide an incentive to landlords that will increase supply, while in no way affecting the position of existing tenants.

There is increasing evidence that it is already happening informally. A survey of Leeds students in 1982 showed that 60 per cent. of the tenancies created were in the form of a licence. The Small Landlords Association told the Environment Committee:
Not one of our members who relets property ever lets it out again under the terms of the Rent Act.
Let us replace the loophole with a shorthold that allows market rents.

Finally, my Bill seeks to guard against the tiny minority of unscrupulous landlords who might be tempted to exploit deregulation by winkling out secure tenants. It increases the penalties for harassment and illegal eviction. I believe that its provisions will provide hope for substantial sections of our people who find it impossible to obtain rented accommodation. I am grateful to my hon. Friend the Minister for being present in the Chamber, and I know that he is undertaking a review of the effects of the Rent Acts. If nothing else, I hope that this Bill will prompt him into taking urgent action to help that group of people.

In common with other Labour Members, I had some doubts as to the reason for introducing this Bill. The hon. Member for Stirling (Mr. Forsyth) let the cat out of the bag when he referred to the ideological reasons that lead him to such a conclusion. If the Government's supporters and the Government themselves feel that such a measure is important, they should have the courage to present it as Government legislation and not seek to introduce it in this way.

The hon. Gentleman referred to the housing problems that we face. I should point out — I hope with some modesty—that I spent some time in, local government trying to undo the damage done to housing by such legislation. It has not always been the case that those involved and interested in housing could rely on the private sector. In my time in local government, some of the worst examples of bad housing and squalor were specifically related to the private sector, yet the hon. Gentleman wishes to give that sector priority. That was so despite the fact—notwithstanding the hon. Gentleman's arguments—that profits were being made by the private sector and by those who owned huge estates, who were not all that concerned about the impact of their rents.

The hon. Gentleman does not seem to have any confidence in our rent tribunals, despite the great interest of the Secretary of State for Scotland in their appointment. I believe that, by and large, they have acted fairly. Property owners who feel cheated or badly treated can go to them. Indeed, I have heard very little criticism of them.

The housing problems which we need to consider stem from the fact that the lowest number of houses has been built in the public sector since the war. There are still problems of squalor, overcrowding, dampness and so on. The Government have treated the whole matter in a
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disgraceful way. Given all the problems, it would seem that the hon. Gentleman has failed to persuade the House that his Bill would contribute one iota to a solution. He has failed to persuade the House that what he is saying is relevant to the solution of the grave housing problems that we face. For those reasons, and to avoid the problems of housing that we have had in the past, including Rachmanism, which may be rearing its ugly head again, I shall oppose the Bill.

§Question put, pursuant to Standing Order No. 15 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):—